States in a country are allowed to set their own rates for sales taxes as well a

Question

States in a country are allowed to set their own rates for sales taxes as well as taxes on services, such as phone calls. The scatterplot shown below graphs the state taxes charged for wireless phone calls (as a percentage) versus the state sales taxes (also as a percentage). Complete parts a through d.

(a) Describe the association, if any, that you find in the scatterplot.

There is (a weak negative association/a strong positive association/a weak positive association/a strong negative association/no association)

(b) Estimate the correlation between the two variables from the plot. Is it positive, negative, or zero? Is it closer to zero or to ± 0.5?

The correlation is (positive/zero/negative). It is closer to (-0.5/0/0.5).

(c) What is the effect of the cluster of states with no sales tax in the lower left corner on the association? If these were excluded from the analysis, would the correlation change?

A. The cluster of states decreases the correlation.

B. The cluster of states increases the correlation.

C. The cluster of states has no effect on the correlation.

If these were excluded from the analysis, would the correlation change?

A. If the cluster of states were excluded from the analysis, the correlation would decrease.

B. If the cluster of states were excluded from the analysis, the correlation would increase.

C. If the cluster of states were excluded from the analysis, the correlation would remain the same.

(d) Would it be appropriate to conclude that states that have high sales tax charge more for services like wireless phone use?

A. Yes. When the outliers are included, the association is strong enough to arrive at this conclusion.

B. No. When the outliers are included, the association is too weak to arrive at this conclusion.

C. No. When the outliers are excluded, the association is too weak to arrive at this conclusion.

D. Yes. When the outliers are excluded, the association is strong enough to arrive at this conclusion.

E. Because there is no association, a conclusion cannot be made.

Explanation / Answer

# Part-A : The Correlation is weak positive

# Part-B : The Correlation is positive It is close to 0.5

#Part- C 1: Answer is A: The cluster of states decreases the correlation

#Part-c2 : Answer is B - If the cluster of states were excluded from the analysis, the correlation would increase

# Part-D : - Answer is D - Yes when the outliers are excluded,the association is strong enough to arrive at this conclusion.

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